In the antitrust case of Mylan v. Celgene, pending in the District of New Jersey (Civil Action No. 14-2094), Judge Esther Salas issued an oral order, finding that Mylan had stated a claim under the Sherman Antitrust Act based on Celgene’s refusal to sell samples of certain pharmaceutical products to Mylan. In particular, Judge Salas found that Mylan had stated a claim for Section 2 liability (monopolization/ attempted monopolization).
On April 3, 2014, Mylan filed suit alleging violations of the Sherman Antitrust Act and various New Jersey state laws based on Celgene’s refusal to sell samples of two different drugs products. One of these products was Thalomid® (thalidomide), which is used to treat lesions associated with leprosy and is also indicated for co-use with an additional drug to treat multiple myeloma. The other drug, Revlimid® (lenalidomide), is used to treat various forms of multiple myeloma. Both drugs are known to cause birth defects if taken during pregnancy, and, as a result, are subject to restricted distribution programs under the FDA’s Risk Evaluation and Mitigation Strategies (“REMS”). In 2007, Congress implemented REMS, which conditions approval of certain drug products with known health risks on the implementation of acceptable safety protocols.
Mylan sought to obtain limited quantities of both of these REMS-listed drugs in order to conduct bioequivalence testing—a prerequisite for approval of its ANDA—to show that its proposed drug products were bioequivalent to Celgene’s reference listed drugs. Celgene refused to sell both drugs products, arguing (1) that it was under no obligation to sell samples to a potential competitor and (2) that doing so would conflict with the strict procedures set out in the REMS protocol that it had written for both drugs.
In opposing the motion to dismiss, Mylan argued that Celgene was maintaining an unlawful monopoly over both brand name drugs by preventing lower-priced generic competition from entering the market. Specifically, Mylan alleged that Celgene was using the REMS for Thalomid® and Revlimid®—distribution programs that Celgene itself had written as a prerequisite for FDA approval—as pretext to prevent Mylan from acquiring the necessary samples to conduct bioequivalence studies. The district court agreed.
Judge Salas noted that in general, there is no affirmative duty to deal with a competitor. Judge Salas explained, however, that this right is not unqualified and that an affirmative duty may arise under certain circumstances, such as when a defendant’s conduct is not justified by any normal business purpose. Judge Salas then went on to find that Mylan had alleged that there was no legitimate business reason for Celgene’s refusal to deal. Although Celgene disputed its anticompetitive conduct, the district court found that Mylan’s pleading was sufficient to allow the case to proceed to discovery.
Judge Salas’s decision is at least the third instance of a district court finding that the Sherman Antitrust Act may impose an affirmative duty on branded companies to sell samples to potential generic competitors for purposes of bioequivalence testing. See Actelion Pharm. Ltd. v. Apotex, Inc., No. 12-5743 (D.N.J. Oct. 21, 2013); Lannett Co., Inc. v. Celgene Corp., No. 8-3920 (E.D. Pa. Mar. 30, 2011). Yet, despite these decisions, without legislative action, it is likely that brand manufacturers will continue to use the REMS distribution program as a guise to limit the access of their competitors to samples for purposes of bioequivalence testing.